Industrial Policy for Economic Development: The Perspectives for Serbia

Abstract

This paper argues that industrial policy, defined as a conscious effort on the part of government to encourage and promote a specific industry or sector, is an indispensable tool for economic development. Serbia is experiencing a process of de-industrialisation since 1990s. During the period 2001-2012 its industry has been growing at an average annual rate of 0.2%, but it however still did not reach the output of the late 1989. The share of industry in GDP has been decreased, as well as the share in the labour productivity. Moreover, employment in industry has sharply decreased. Serbian exports are dominated mostly by primary and labour- and resource-intensive products making unfavourable export structure. This paper argues that devastated industry of Serbia cannot recover without conscious efforts on the part of government.